Gold rises to all-time high amid trade tensions; analysts see more upside

Gold prices have hit a record high, bolstered by fears of a new trade war between the US and China after Beijing slapped tariffs on US imports in response to new US duties on Chinese goods.

- Kang Wan Chern

Spot gold on Feb 5 exceeded US$2,870 per ounce for the first time, while US gold futures, which provide an indication of where prices are headed in the future, surpassed US$2,900 per ounce, a new high.

US President Donald Trump said on Feb 4 that he was in no hurry to speak to Chinese President Xi Jinping to try to defuse the trade tensions, after China imposed targeted tariffs on US imports on the same day. It also put several US companies, including Google, on notice for possible sanctions, in a measured response to Mr Trump's tariffs.

Mr Vasu Menon, managing director of investment strategy at OCBC Bank, told The Straits Times that more upside could be in store for gold in 2025.

This is because investors and central banks have been buying the precious metal to diversify their portfolios and protect themselves from global risks.

"Greater geopolitical and economic uncertainties under Mr Trump could benefit safe havens like gold, which is seen as a good portfolio diversifier and a hedge against global uncertainties," Mr Menon said.